Did Silver Prices Reach Record Highs on the MCX Due to Rate-Cut Anticipations?
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Synopsis
Silver prices have soared to unprecedented levels thanks to global economic indicators and the anticipation of interest rate reductions. With significant movements in both silver and gold, the market is on high alert. Discover the factors fueling this surge and the implications for investors.
Key Takeaways
- Silver prices hit record highs on the MCX.
- Interest rate cut expectations are boosting demand.
- Geopolitical tensions are contributing to market dynamics.
- Gold prices are showing signs of weakness.
- Investors should monitor price support levels closely.
Mumbai, Dec 17 (NationPress) Silver prices have achieved unprecedented heights on Wednesday, driven by robust global indicators and mounting hopes for interest rate reductions that propelled the precious metal significantly higher.
On the Multi Commodity Exchange (MCX), silver prices increased over 4 percent in early trading, continuing their recent upward trajectory.
During this period, MCX silver was trading 3.38 percent higher at Rs 2,04,445 per kg after reaching a historic peak.
Conversely, gold prices exhibited some decline. MCX gold for February delivery fell 0.21 percent to Rs 1,34,129 per 10 grams.
Experts noted, “A sustained breakout above Rs 1,35,500, bolstered by renewed USD/INR strength, would enhance bullish momentum, opening the next expansion zone at Rs 1,36,000–Rs 1,38,000.”
“The broader bullish trend remains intact as long as prices stay above the Rs 1,33,000–Rs 1,32,600 support zone,” they added.
In the international market, silver also experienced a significant surge, with spot silver climbing 2.8 percent to a record high of $65.63 per ounce, crossing the $65 threshold for the first time.
Spot gold was trading slightly up at $4,321.56 per ounce by 0230 GMT, primarily supported by a weaker US dollar.
The sharp increase in silver prices followed disappointing US labor market data that bolstered expectations of interest rate cuts by the Federal Reserve.
Reports indicated that the US unemployment rate rose to 4.6 percent in November, suggesting a slowdown in the labor market.
This shift has heightened demand for non-yielding assets like precious metals, especially following the central bank's dovish stance after its final quarter-point rate cut of the year.
Geopolitical tensions also contributed to buying momentum, as US President Donald Trump ordered a blockade of all sanctioned oil tankers entering and leaving Venezuela, intensifying pressure on President Nicolas Maduro amid reports of increased military activity in the area. This situation has boosted safe-haven demand, further propelling silver prices.
Point of View
I believe that the recent surge in silver prices highlights the dynamic nature of the financial markets. Investors must remain vigilant as global economic indicators and geopolitical tensions continue to influence precious metal prices. It’s crucial to stay informed and adapt strategies accordingly.
NationPress
17/12/2025
Frequently Asked Questions
Why are silver prices increasing?
Silver prices are rising due to strong global cues and expectations of interest rate cuts, leading to increased demand for the metal.
What impact do interest rate cuts have on silver?
Interest rate cuts tend to boost demand for non-yielding assets like silver, as they become more attractive compared to interest-bearing investments.
How did geopolitical tensions affect silver prices?
Geopolitical tensions, such as the US blockade of oil tankers in Venezuela, have heightened demand for safe-haven assets like silver.
